McClain v. Comm'r
United States Tax Court
A agreed, in consideration of his employment by B, to assign to B all inventions relating to B's business that might be made by A during said employment. A then conceived two patentable inventions and executed assignments thereof to B. Subsequently, B announced to its employees a program for paying employee-inventors certain percentages of any income received by B as the result of its sale or licensing of employee inventions to third parties.
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A agreed, in consideration of his employment by B, to assign to B all inventions relating to B's business that might be made by A during said employment. A then conceived two patentable inventions and executed assignments thereof to B. Subsequently, B announced to its employees a program for paying employee-inventors certain percentages of any income received by B as the result of its sale or licensing of employee inventions to third parties. Held, such amounts received by A from B qualified as capital gains under sec. 1235.
1Opinion of the Court
OPINION
Forrester, Judge•
Respondent determined deficiencies in petitioners’ income taxes for the calendar years 1957 and 1958 in the amounts of $2,913.62 and $1,756.27, respectively. Petitioners assert an overpayment of such taxes for 1958 of $999.31. The sole issue for decision is whether certain income received from his employer by petitioner Thomas H. McClain (hereinafter referred to as McClain or petitioner) was ordinary income or capital gain.
All of the facts have been stipulated and are so found.
Petitioners are husband and wife residing in La Canada, Calif. They filed joint Federal…
2Cases cited4 opinions
- Commissioner v. DubersteinSupreme Court of the United States · 1960
- Lucas v. Ox Fibre Brush Co.Supreme Court of the United States · 1930
- Hofferbert, Collector of Internal Revenue v. BriggsCourt of Appeals for the Fourth Circuit · 1949
- Chilton v. CommissionerUnited States Tax Court · 1963
3Cited by12 opinions
- Beausoleil v. CommissionerUnited States Tax Court · 1976
- Ofria v. CommissionerUnited States Tax Court · 1981
- Boulez v. CommissionerUnited States Tax Court · 1984
- Herbert S. And Arlene S. Lehman v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1987
- Beausoleil v. CommissionerUnited States Tax Court · 1976
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